$4.6 billion in taxpayer funding went to JobKeeper for companies which flourished in the first months of coronavirus lockdowns

$4.6 billion in taxpayer funding went to JobKeeper for companies which flourished in the first months of coronavirus lockdowns
Queen Victoria Building and Sydney Town Hall in Sydney, Australia, New South Wales.
  • Nearly $4.6 billion in JobKeeper payments were provided to businesses which saw their turnover increase in the scheme’s first months.
  • Some 157,650 firms which received the subsidy between April and June 2020 saw business conditions improve, the ABC reports.
  • Labor MP Andrew Leigh, who has crusaded for more oversight of the scheme, said Australia has “never seen public waste on this scale”.
  • Visit Business Insider Australia’s homepage for more stories.

Nearly $4.6 billion in JobKeeper wage subsidy payments flowed to companies which actually improved their turnover in the first three months of the scheme, reigniting debate over the federal government’s handling of the landmark support measure.

Citing figures obtained by Labor MP Andrew Leigh through the Parliamentary Budget Office, the ABC reports that some 157,650 companies which received the payment between April and June 2020 saw their turnover increase.

The Commonwealth-funded JobKeeper program provided $90 billion in payroll support to businesses which suffered through the first waves of coronavirus lockdowns and industry closures.

The payment originally provided employers with $1,500 to pass on to employees, with the goal of keeping at-risk Australians attached to their workplace through widespread shutdowns.

JobKeeper was initially open to businesses with annual turnover of less than $1 billion which could demonstrate, or reasonably predict, a drop in turnover of 30% or more. For firms with turnovers over $1 billion, that figure rose to 50%. Non-profits were also eligible, if they anticipated a slowdown of 15% or greater.

The unprecedented payroll support arrived as Australia stared into a financial black hole, with government and private sector analysts fearing the pandemic could demolish the national economy.

But ABC reports some 365,000 employers who predicted plummeting turnover between April and June never saw their turnover dip below the program’s threshold levels. Those firms accumulated around $12.5 billion in taxpayer funding, the figures show.

Despite many JobKeeper recipient firms posting massive profits through the second half of 2020 and beyond, there is no legal requirement for once-eligible businesses to return the taxpayer funds they accrued.

Treasurer Josh Frydenberg has welcomed repayments from JobKeeper-eligible firms which profited through the first year of the pandemic. However, he has repeatedly asserted the government will not actively chase those firms for payback.

Leigh, who has long crusaded for tighter oversight of the program and for profitable companies to return excess JobKeeper funding, on Friday tweeted that Australia has “never seen public waste on this scale”.

Appliance and furniture retailer Harvey Norman has vowed to hold on to the millions in JobKeeper payments it received, despite profits more than doubling to $462m in the first half of 2020.

The JobKeeper funding provided to companies whose turnover did not dip below the original thresholds could have funded “a dozen hospitals, and [is] more than the federal govt spends on public schools,” Leigh tweeted.

JobKeeper wound down at the end of March this year, with Frydenberg claiming it was always intended to be a temporary measure designed to keep vulnerable workers afloat during industry shutdowns.

Yet the return of lengthy lockdowns in Greater Sydney and new snap closures in Victoria and South Australia has again reinvigorated calls for bolstered federal support.

The Australian National Audit Office is set to table its report on the scheme’s administration in December.